Colorado § 39-22-119 - Expenses related to child and dependent care - refundable credit against state tax - tax preference performance statement - legislative declaration - definition - repeal.

§ 39-22-119. Expenses related to child and dependent care - refundable credit against state tax - tax preference performance statement - legislative declaration - definition - repeal.

(1) Repealed.

(1.3) (a) The general assembly finds and declares that, pursuant to section 39-21-304 (1), the income tax credit created in this section is intended to provide tax relief for certain individuals. Specifically, the credit is intended to assist low- and moderate-income Coloradans in meeting the high cost of child and dependent care by providing additional support beyond what may be available through federal tax law.

(b) The general assembly and the state auditor shall measure the effectiveness of the credit in achieving the purpose specified in subsection (1.3)(a) of this section based on the number of resident individuals who have claimed the credit and the total amount of credits claimed.

(1.5) Repealed.

(1.7) (a) (I) For income tax years beginning on and after January 1, 2019, but before January 1, 2026, if a resident individual's federal adjusted gross income is less than or equal to sixty thousand dollars and the individual claims a credit for child and dependent care expenses on the individual's federal tax return as allowed pursuant to section 21 of the internal revenue code, then the individual is allowed a child and dependent care expenses credit against the income taxes imposed by this article 22. The credit is an amount equal to fifty percent of the credit for child and dependent care expenses claimed on the individual's federal tax return for the same income tax year.

(II) This subsection (1.7)(a) is repealed, effective December 31, 2030.

(b) For income tax years beginning on and after January 1, 2026, except as provided in subsection (1.7)(c) of this section, if a resident individual's federal adjusted gross income is less than or equal to sixty thousand dollars, then the individual is allowed a child and dependent care expenses credit against the income taxes imposed by this article 22. The credit is an amount equal to seventy percent of the federal credit allowed pursuant to section 21 of the internal revenue code and calculated without regard to the limitation imposed by section 26 of the internal revenue code.

(c) (I) For income tax years commencing on or after January 1, 2027, the executive director shall adjust the federal adjusted gross income limit set forth in subsection (1.7)(b) of this section for inflation for each income tax year in which the credit is allowed if cumulative inflation since the last adjustment, when applied to the current limitation, results in an increase of at least one thousand dollars when the adjusted limits are rounded to the nearest one thousand dollars.

(II) As used in this subsection (1.7)(c), "inflation" means the annual percentage change in the United States department of labor bureau of labor statistics consumer price index, or a successor index, for Denver-Aurora-Lakewood for all items paid by urban consumers.

(2) If the credit allowed pursuant to this section exceeds the income taxes due on the resident individual's income, the amount of the credit not used to offset income taxes is not carried forward and must be refunded to the individual.

(3) The child and dependent care expenses credit allowed pursuant to this section is not allowed to a resident individual who is receiving child care assistance from the department of early childhood except to the extent of the taxpayer's unreimbursed out-of-pocket expenses that result in a federal credit for child and dependent care expenses.

(4) In the case of a resident for part of a tax year, the credit allowed by this section is apportioned in the ratio determined under section 39-22-110 (1).

(5) to (9) Repealed.

(10) Notwithstanding section 39-21-304 (4), the credit allowed pursuant to this section continues indefinitely.

Source: L. 96: Entire section added, p. 1096, § 1, effective May 30. L. 98: (1.5) added and (2) to (4) amended, p. 1373, § 1, effective June 2. L. 2000: (2) and (3) amended and (5), (6), (7), (8), and (9) added, p. 675, § 1, effective May 23. L. 2010: (1.5), (5), (6), (7), (8), and (9) repealed and (2) and (3) amended, (SB 10-212), ch. 412, pp. 2032, 2035, §§ 1, 8, effective July 1. L. 2018: IP(1)(a), (2), and (3) amended and (1.7) added, (HB 18-1208), ch. 227, p. 1437, § 1, effective August 8. L. 2022: (3) amended, (HB 22-1295), ch. 123, p. 868, § 128, effective July 1. L. 2024: (1) repealed, (1.3) and (10) added, and (1.7), (2), (3), and (4) amended, (HB 24-1134), ch. 172, p. 926, § 1, effective August 7.